Hertler Market Signal Update #848 10/7/2018 1
Hertler Market Signal Update
#848 October 7, 2018
SMI, EMC, and LMC are bullish. But sentiment indicators are mostly
bearish.
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S&P 500
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Smart Money Index (SMI)
___SMI 50-DMA
___SMI 200-DMA
S&P 500 vs Smart Money Index
The Smart Money Index fell to a new low. Since September 2016 the SMI has correlated
inversely with the S&P 500. Thus, its downward trend is bullish.
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S&P 500
2/26/2017
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S&P 500 vs LMC
___LMC 50-DMA
___LMC 200-DMA
LMC (Cumulative Late Market Component of SMI)
The late market component (LMC) of the Smart Money Index dropped to a new low. The
LMC had not correlated reliably with stock prices for a long time. But, since February 2017 the
LMC has been moving inversely with the S&P 500. Based upon that inverse relationship, we can
consider the LMC to be long-to-intermediate term bullish.
Hertler Market Signal Update #848 10/7/2018 2
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S&P 500
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www. hertlermarketsignal.com
EMC (Cumulative Early Market Component of SMI)
S&P 500 vs EMC
___EMC 50-DMA
___EMC 200-DMA
The EMC (early market component of the SMI) rose to a new high. Although in theory the
EMC is supposed to represent the dumb money – the emotional traders – it is apparent that the
EMC has been correlated well with the S&P. Thus, EMC remains bullish.
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0.06
0.062
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0.072
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Russell 2000 Small Cap
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Ratio of Russell 2000 to DJIA
Small Caps vs Ratio of Russell 2000 Small Caps to DJIA
The small cap/DJIA ratio has so far failed to push above its long term down-trend line.
The ratio has been in a down-trend for over 3 years and dropped precipitously last week
bearish.
Hertler Market Signal Update #848 10/7/2018 3
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NASDAQ COMP
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Ratio of NASDAQ Composite to S&P 500
NASDAQ Comp vs Ratio of NASDAQ Comp. to S&P 500
The ratio of the NASDAQ Composite to the S&P has not made a new high since June 21
of this year while the NASDAQ Composite just made a new high. This is a bearish divergence.
The current sharp decline has turned this indicator bearish.
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NYSE Composite
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Fear Index: Product of VIXO and Total Put/Call
Ratio (50-Day Moving Average)
NYSE Composite vs Fear Index
___Fear 5-DMA
Hertler Market Signal Update #848 10/7/2018 4
The Fear Index, 5-day moving average rose slightly, but the 50-day moving average
remains low bearish.
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DJIA
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IDV (Interday Volatility of DJIA, %) 10-Day Moving Avg.
DJIA vs Interday Volatility of DJIA
The 10-Day Interday Volatility rose slightly. But, it remains subdued.
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DJIA
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IDV (Intraday Volatility of DJIA, %) 10-Day Moving Avg.
DJIA vs Intraday Volatility of DJIA
The 10-Day Intraday Volatility was nearly unchanged during the past two weeks.
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NYSE Composite
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Optimism Index (OEX 15-Day Put/Call divided
by Relative VXO)
NYSE Composite vs Optimism Index
The Optimism Index fell below the bottom of its current range.
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S&P 500
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S&P 500 vs S&P 100 Option 15-Day Put/Call Ratio
The "smart money" OEX Put/Call Ratio is
Bearish above 1.4 and Bullish below 1.0.
CBOE S&P 100 Option Put/Call Ratio
(15-Day Moving Average)
The smart money OEX put/call ratio has fluctuated in a range that can be defined as
bearish above 1.4 and bullish below 1.0. It rose above 1 and is now neutral.
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S&P 500
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www. hertlermarketsignal.com
AAII Bull-Bear
S&P 500 vs AAII Member Bulls Minus Bears
The AAII member bulls minus bears surged to a bearish level.
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The Smart Money Index is bullish as are the EMC and the LMC.
The relative strength of the NASDAQ Composite has turned bearish.
The relative strength of small caps is very bearish.
The Fear Index is bearish.
The Interday Volatility Index is low.
The Intraday Volatility Index is low.
The Optimism Index is bullish.
The OEX put/call ratio is neutral.
AAII member optimism is bearish.